Oil wells are usually dry when first drilled, which means that they produce only oil. However, after an oil well has been in production for a period of time, which may be ten to fifteen years or more, the well may begin to co-produce water with the crude oil flow. The water is typically an incursion from a local aquifer that begins to move through the reservoir rock as the oil pressure is lowered. The more water wet the well becomes, the lower the net oil rate is, to the point where the water production becomes too high to be lifted to the surface. At this point, the percentage of oil in proportion to the water cut may be so low, or be reduced to zero, so as to take the well out of production. Therefore, water production must be controlled so as not to lose oil production.
In addition to naturally occurring water incursions, it is often the practice to pump or allow water to flow under the influence of gravity into bore holes in the vicinity of the oil production area, in what is called water injection, to maintain reservoir pressure and sweep oil towards production wells. In this context, the sweep efficiency is defined as the percentage of oil being swept by water. The definition of 100% sweep efficiency is that oil is completely swept by water in a piston-like displacement, which is never the case in physical applications. Usually injected water will finger through the oil and bypass some oil. Poor sweep efficiency is a result of water bypassing most of the oil by channeling through and reaching the oil producing wells. This in return will result in loss by leaving oil in the ground.
The severity of water production is conventionally measured by water cut percent, measuring produced fluid rates by meters at the surface and calculating the water cut from the measured water and oil rates at surface conditions. Water cut is defined as the percentage that the water rate represents of the total rate of a well or:
                    WC        =                                            q              w                                                      q                w                            +                              q                o                                              ×          100          ⁢          %                                    (        1        )            Where:
WC=water cut
qo=oil rate
qw=water rate
Hence, a well producing at 50% water cut is more severely affected than a well producing at 30% water cut.
Depending upon the nature of the geological formation, and particularly on faults or discontinuities in the reservoir rock structure, the water may flow unevenly in lateral and vertical directions from the point of its injection. Thus, water fed into the oil reservoir formation at one point may quickly advance to a producing well and appear as a water cut whose value, or percentage of total flow, increases over time. Other portions of the injected water may serve their intended purpose which is to provide a pressure to force the oil in the reservoir rock to move towards the producing well.
In accordance with long-standing practices in the oil exploration and production industry, the historical value of the water cut is maintained for each well in any given field throughout the life of the well, which runs in the tens of years in some cases.
In the past, the absolute value of the water cut at any given time has been considered the most relevant information from the standpoint of managing the overall production from wells in the field. This has been the practice, even though historical data may be available for time periods of ten, twenty or even forty years in highly productive fields.